Price still needs to get below the 38.2% at 1.38255
The GBPUSD is now near unchanged on the day after rising up and testing a swing area between 1.3871 and 1.38761.
That swing area corresponded with a swing low floor from August 2, August 3 and August 5 (see red numbered circles).
Admittedly, that old floor did nothing yesterday as the price chopped above and below the area with little in the way of respect. However today, traders leaned and in doing so made the old floor a ceiling (it just has a few holes in it from yesterday’s trade).
The sellers are making a bias play with the hold (bearish). However, they still have work to do.
The swing highs going back to July 26 and July 27 come in between 1.38287 and 1.38327 and the 38.2% retracement of the move up from the July 20 low is at 1.38255.
Getting below that swing area and retracement level is the minimum target if the sellers are to start to scare dip buyers. Absent that, and the dip buyers will simply lean against the level, with hopes to tire the sellers and lead to a resumption to the upside (and back above the old floor and falling 100/200 hour MAs).
Sellers are making a play, but they have work to do.
PS like other currency pairs today, the range for the GBPUSD is a very modest 37 pips. That is well below the 86 pips 22-day average. There is room to roam